fill in the blank question\nabc company uses machine - hours to apply manufacturing overhead to units…

fill in the blank question\nabc company uses machine - hours to apply manufacturing overhead to units produced. if abc estimates that it will generate 560,000 machine hours and incur $6,720,000 in manufacturing overhead costs during the year, its predetermined overhead application rate will be $____ per hour.\nneed help? review these concept resources.\nread about the concept

fill in the blank question\nabc company uses machine - hours to apply manufacturing overhead to units produced. if abc estimates that it will generate 560,000 machine hours and incur $6,720,000 in manufacturing overhead costs during the year, its predetermined overhead application rate will be $____ per hour.\nneed help? review these concept resources.\nread about the concept

Answer

Explanation:

Step1: Recall formula for overhead rate

The formula for the predetermined overhead - application rate is $\text{Predetermined Overhead Rate}=\frac{\text{Estimated Manufacturing Overhead Costs}}{\text{Estimated Activity Level}}$.

Step2: Identify values

The estimated manufacturing overhead costs are $$6,720,000$ and the estimated activity level (machine - hours) is $560,000$ hours.

Step3: Calculate the rate

$\text{Predetermined Overhead Rate}=\frac{6720000}{560000}=12$

Answer:

$12$